Prospects remain unclear for MCX Aluminium

Gurumurthy K BL Research Bureau | Updated on January 29, 2018

The Aluminium futures contract on the Multi Commodity Exchange (MCX)has been stuck in a narrow range between ₹140 and ₹144 per kg over the past week. The immediate outlook is unclear.

A breakout on either side of ₹140 or ₹144 will decide the next move. Traders can continue to stay out of the market until the range breakout, which can give a clear cue on the next trend.

If the contract continues to trade below ₹144 and declines breaking the lower end of the range ₹140, then it can come under pressure. Such a fall can take the contract lower to the crucial support level of ₹137. A bounce from ₹137 will ease the downside pressure. In such a scenario, a relief rally to ₹140 or even higher levels is possible. But if the contract breaks below ₹137 decisively, it can come renewed selling pressure. Such a break will increase the likelihood of the contract tumbling to ₹132 or ₹131 on the back of profit booking.

On the other hand, if the contract manages to break the current range above ₹144 in the coming days, the downside pressure will ease. In that case, the MCX Aluminium futures contract can target to the key long-term resistance level of ₹148.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

Published on January 29, 2018

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